International finance servicer, Sun Life Financial, intends to acquire a majority stake in alternative credit investment manager, Crescent Capital Group. Crescent will form part of SLC Management, Sun Life’s alternatives asset management business.
Sun Life will acquire a 51% interest in Crescent for up to $338 million, consisting of an upfront payment of $276 million and a future payment of up to $62 based on the achievement of certain milestones. As part of the transaction, Crescent’s equity holders will retain carried interests in existing funds along with certain assets and their respective economics. The transaction has a put/call option that will allow the transfer of remaining interests approximately five years from closing. Crescent will continue to operate independently under its current leadership and will retain its distinct brand, office locations and clients.
Sun Life has committed to co-invest up to $750 million in Crescent’s investment strategies, supporting the launch of new products and creating alignment with Crescent’s investors.
“We’re excited that Crescent will be joining SLC Management. Crescent has an excellent track record in alternative credit investing and an exceptional reputation in the industry,” Steve Peacher, president of SLC Management, said. “SLC Management and Crescent share a common vision based on delivering outstanding performance for our investors.”
“This partnership represents the next stage of growth for Crescent. In getting to know the team at Sun Life and SLC Management, we feel confident our clients will benefit from the significant seed capital they are providing, their deep understanding of the asset management business, and commitment to Crescent retaining full investment and operational independence of the firm,” Mark Attanasio, co-founder and managing partner of Crescent Capital Group, said.
“With our longstanding investment track record, we look forward to further building upon our existing alternative credit investment capabilities, as well as providing clients with new investment strategies as the demand for yield grows globally among our roster of leading institutional investors,” Jean-Marc Chapus, co-founder and managing partner of Crescent Capital Group, said.
“We have spent considerable time with Dean Connor and Steve Peacher along with their teams. Together we believe our firms’ complementary cultures will further benefit our employees, clients, investors, and stakeholders,” Attanasio and Chapus said in a joint statement.
“We’ve been looking to expand our alternative credit capabilities for some time now, offering our clients a broader, deeper array of investment solutions across the public and private credit markets, infrastructure, real estate equity and debt,” Peacher said.
SLC Management, Sun Life and Crescent are signatories of the principles of responsible investing.
Moelis & Company and Sullivan & Cromwell acted as exclusive financial advisor and legal counsel, respectively, to Crescent. Skadden, Arps, Slate, Meagher & Flom served as Sun Life’s legal counsel and Berkshire Global Advisors served as its financial advisor.
The transaction is expected to close in late 2020, subject to receipt of regulatory approvals and satisfaction of customary closing conditions. Crescent currently serves as the investment adviser of Crescent Capital BDC, a business development company. Upon completion of the transaction, Crescent is expected to become a majority-owned subsidiary of SLC Management and, subject to the approval of Crescent BDC’s shareholders, remain the investment adviser of Crescent BDC.
